R
ent prices are continuing to trend downward, with the median asking rent in the 50 largest metros falling to $1,720 in October 2024, a decrease of $23 from last month and $40 from its August 2022 peak. According to Realtor.com economist Jiayi Xu, this marks the 15th consecutive month of rent price drops.
While the decreases have been modest, with a year-over-year dip of just $9, it's still welcome news for renters searching for affordable housing options. However, rents remain higher than they were before the COVID-19 pandemic, with a median asking rent that's $272 more than in October 2019.
The general rise in rents over the past few years can be attributed to inflation, which has grown by 18.8% over the past five years. This is slightly lower than the overall consumer price inflation rate of 22.7%, but still enough to keep rents elevated. In contrast, the median price per square foot of for-sale home listings surged by a whopping 50.5% during the same period.
Rental prices are starting to cool further, especially for smaller apartments like studios and one-bedroom units, which saw year-over-year declines of 1.2% and 0.9%, respectively. This shift is largely due to an increase in housing supply, driven by construction projects that began during the pandemic.
Between January and September 2024, the average annualized rate of multifamily home completions reached 606,000 units, a 36.1% increase over the same period in 2023. The South saw the most significant rise in new completions, with a year-over-year growth rate of 49.1%, followed by the Midwest (44.9%), West (23.9%), and Northeast (7.4%).
The added supply is beginning to ease pressure on renters, making cities like Miami, Austin, TX, and Memphis, TN more accessible. Rents fell in these cities by 1.3%, 4.2%, and 5.4%, respectively. The top 10 metros where rents have fallen the most include Denver, CO (-5.6%), Memphis, TN (-5.4%), Nashville, TN (-5.2%), Dallas, TX (-4.3%), Austin, TX (-4.2%), Chicago, IL (-4.1%), San Antonio, TX (-4.1%), Phoenix, AZ (-4.5%), Charlotte, NC (-3.8%), and Atlanta, GA (-3.4%).
